Annuity Benefits
An annuity is an agreement with an insurance company, enabling you to receive payments on a set schedule. Usually, this contract can allow you to receive money for the rest of your life.
An annuity can provide you with regular monthly or annual payments. However, the individual details vary from policy to policy.
Furthermore, there are different types of annuities. For example, a fixed annuity, fixed indexed annuity (FIA) or a variable annuity. Fixed annuities and FIAs won’t lose money when the market drops. However, variable annuities might suffer losses if the market goes down. Because we believe in safety of principal as one of our core values, it’s our belief that you should select a product that provides protection. Furthermore, you should look to earn a reasonable rate of return.** An FIA can provide you with both of these benefits. Interested in learning more? Reach out to us.
How to Achieve A
Fixed Indexed Annuity Benefits
A fixed indexed annuity has the benefit of keeping your money safe. This is because, unlike many more traditional retirement plan accounts, it doesn’t invest money directly in the stock market. However, an FIA’s interest rate is based on the performance of a stock market index. For example, the S&P 500. This isn’t the same as your money being directly invested: If the market goes up, you may see a higher interest rate. However, if the market is on a downward trend, you won’t lose any money. The insurance company sets the money aside in a reserve to protect it. The contract and the strength of the insurance company will protect you.
Phases of an Annuity
There are two main phases to an annuity contract: The accumulation phase, and the distribution phase. During the accumulation phase, you leave the money contributed to the annuity untouched. You allow it to grow, tax-deferred, based on the performance of a market index or possibly multiple indexes. The distribution phase begins when you begin receiving payments from your FIA. When you can begin taking payments will be specified in your individual contract.
Interested in learning more about FIAs? Reach out to us. These products are one of the things we discuss at our educational seminar events. Or, if you want to cut right to the chase, you could schedule a one-on-one meeting with us. We can discuss your individual situation and determine whether or not an FIA is right for you.
